Question
In: Accounting
a) Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The...
a) Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The following transactions occurred between the two entities:
On 1 June 2016, Liala Ltd sold inventory to Jordan Ltd for $12,000, this inventory previously costed Liala Ltd $10,000. By 30 June 2016, Jordan Ltd had sold 20% of this inventory to other entities for $3,000. The other 80% was all sold to external entities by 30 June 2017 for $13,000.
During the 2016–17 period, Jordan Ltd sold inventory to Liala Ltd for $6,000, this being at cost plus 20% mark-up. Of this inventory, 20 % remained on hand in Liala Ltd at 30 June 2017. The tax rate is 30%.
Required:
(i) Prepare the consolidation worksheet entries for Liala Ltd at 30 June 2017 in relation to the intragroup transfers of inventory.
(ii) Compute the amount of cost of goods sold to be reported in the consolidated income statement for 2017 relating to the relevant intra-group sales.
b) On 1 July 2016, Liala ltd sold an item of plant to Jordan Ltd Ltd for $150,000 when its carrying value in Liala Ltd book was $200,000 (costs $300,000, accumulated depreciation $100,000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and equipment using a costs model. Tax rate is 30 percent. Required:
Prepare the necessary journal entries in 30 June 2017 to eliminate the intra-group transfer of equipment.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Liala Ltd acquired all the issued shares of Jordan Ltd on 1 January 2015. The following...
Liala Ltd acquired all the issued shares of Jordan Ltd on 1
January 2015. The following transactions occurred between the two
entities:On 1 June 2016, Liala Ltd sold inventory to Jordan Ltd
for $12,000, this inventory previously costed Liala Ltd $10,000. By
30 June 2016, Jordan Ltd had sold 20% of this inventory to other
entities for $3,000. The other 80% was all sold to external
entitiesby 30 June 2017 for $13,000.During the 2016–17 period,
Jordan Ltd sold inventory to...
On 1 July 2015, Richard Ltd acquired all the issued shares of Elizabeth Ltd. The following...
On 1 July 2015, Richard Ltd acquired all the issued shares of
Elizabeth Ltd. The following information relates to the inter
entity transactions that have occurred between Richard and
Elizabeth to June 2017.
Inter entity Transactions
(a) Richard Ltd sells certain raw materials to Elizabeth Ltd to
be used in its manufacturing process.
At 1 July 2016, Elizabeth Ltd held inventory sold to it by
Richard Ltd in the previous year at a profit of $600. During the
2016–17 year,...
Individual Assignment ACC705 On 1 July 2015, Tuna Ltd acquired all the issued shares of Brim...
Individual Assignment
ACC705
On 1 July 2015, Tuna Ltd acquired all the issued shares
of Brim Ltd. Tuna Ltd paid $30 000 in cash and 20 000 shares in
Tuna Ltd valued at $3 per share. At this date, the equity of Brim
Ltd consisted of $66 000 share capital and $6000 retained
earnings.
At 1 July 2015, all the identifiable assets
and liabilities of Brim Ltd were recorded at amounts equal to their
fair values except for:
Carrying...
On 1 July 2022, Dean Ltd acquired all the issued shares of Lewis Ltd for a...
On 1 July 2022, Dean Ltd acquired all the issued shares of Lewis
Ltd for a cash consideration of $1 000 000. At that date, the
financial statements of Lewis Ltd showed the following
information.
Share capital $650 000
General reserve 20 000
Retained earnings 250 000
All the assets and liabilities of Lewis Ltd were recorded at
amounts equal to their fair values at the acquisition date, except
some equipment recorded at $50 000 below its fair value with...
On 1 July 2017, Patience Ltd acquired all the issued shares of Silence Ltd for a...
On 1 July 2017, Patience Ltd acquired all the issued shares of
Silence Ltd for a cash consideration of $1,000,000. At that date,
the financial statements of Silence Ltd showed the following
information.
Share capital $650000
General reserve $20000
Retained earnings $ 250000
All the assets and liabilities of Silence Ltd were recorded at
amounts equal to their fair values at the acquisition date, except
some equipment recorded at $50,000 below its fair value with a
related accumulated depreciation of...
On 1 January 2019 Liam Ltd acquired 90% of the issued shares of Ian Ltd. During...
On 1 January 2019 Liam Ltd acquired 90% of the issued shares of
Ian Ltd. During the year ended 31 December 2019 the following intra
group transactions occurred:
Sales of inventory:
Ian Ltd sold inventory to Liam Ltd
$360,000. This inventory costed Ian Ltd $300,000. At 31 December
2019 Liam Ltd held 50% of the inventory acquired from Ian Ltd.
Intragroup sale of equipment:
An item of equipment originally
acquired by Liam Ltd on 1 January 2017 at a cost...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent. Required: Pass the necessary entries
on 30 June 2017 and 30 June 2018 to eliminate the...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent.
Required:
Pass the necessary entries on 30 June 2017 and 30 June 2018 to
eliminate the...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent.
Required: Pass the necessary entries on 30 June 2017 and 30 June
2018 to eliminate the...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000...
On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for
$450000 when its’ carrying value in Liala Ltd book was $600000
(costs $900000, accumulated depreciation $300000). This plant has a
remaining useful life of five (5) years form the date of sale. The
group measures its property plants and equipment using a costs
model. Tax rate is 30 percent.
Required:
Pass the necessary entries on 30 June 2017 and 30 June 2018 to
eliminate the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- DeLuxe Furniture is thinking of buying a wood cutting machine for $150,000 that would save it...
- As an investor, what should you look for when performing ratio analysis of a company? What...
- Harrison Company maintains a checking account at the First National City Bank. The bank provides a...
- The 17 year, $1000 par value bonds of Waco Industries pay 6 percent interest annually. The...
- Assuming DNA polymerization by each polymerase in the DNA Pol III holoenzyme proceeds at a rate...
- Task 1: Implement the constructor for the Hostess struct. It must initialize all member variables, including...
- Pillow Corporation acquired 80 percent ownership of Sheet Company on January 1, 20X7, for $173,000. At...
ADVERTISEMENT